Ep25 Short-Term and Mid-Term Host with Kelsey Porter

[00:00:00] [SPEAKER_04]: You do have to leave a little bit in there. I want to say it's 10%, but don't quote me on that.

[00:00:04] [SPEAKER_04]: You do have to leave some of your equity in that account from your down payment,

[00:00:07] [SPEAKER_04]: but in theory you could pull out the rest of it if you needed to and go buy something else.

[00:00:11] [SPEAKER_04]: And that's why we wanted to do it.

[00:00:12] [SPEAKER_00]: From cornfields to high rises, office to industrial, houses to hotels and every other asset class

[00:00:18] [SPEAKER_00]: in real estate, we covered the people, the projects, and the profit. Welcome to The Investing

[00:00:24] [SPEAKER_00]: Iowa Show. This show is for go-doers, action takers, and business owners. It's for people like you

[00:00:31] [SPEAKER_00]: who are sick of Uncle Sam taking a huge bite of your apple. If you're looking to get ahead of what's

[00:00:37] [SPEAKER_00]: taking place in Iowa, learn who is doing what and how you can get in on the action. You're

[00:00:42] [SPEAKER_00]: in the right place. Hosted by Neil Timmins, an Iowa native who has been involved in over

[00:00:47] [SPEAKER_00]: $300 million in real estate right here in Iowa. Recording in studio from West Des Moines,

[00:00:54] [SPEAKER_00]: here's your host Neil Timmins. Kelsey Porter here on the show. Kelsey, welcome.

[00:01:00] [SPEAKER_02]: Thank you. Thank you for having me. I'm excited you're here. Say for the audience to say,

[00:01:03] [SPEAKER_02]: who are you? Where are you from? What do you do?

[00:01:05] [SPEAKER_04]: I'm Kelsey Porter. I'm a realtor and real estate investor in the Des Moines, Iowa area.

[00:01:11] [SPEAKER_04]: I originally grew up in St. Louis though. And my other half, who I own all of our

[00:01:15] [SPEAKER_04]: properties with, he grew up in Kansas City. But yeah, we lived in Cleveland, Ohio for seven years

[00:01:21] [SPEAKER_04]: and two years ago, we packed everything up and to move closer to family after COVID and everything

[00:01:25] [SPEAKER_04]: happened, we chose Des Moines. How did you choose Des Moines? So we already own a duplex

[00:01:30] [SPEAKER_04]: here. So we were out of state investors from the start. And yeah, we wanted to choose a

[00:01:36] [SPEAKER_04]: city where I was confident I could grow my business as a realtor. And I do have a ton

[00:01:42] [SPEAKER_04]: of family that lives in a very small town, a little bit southwest of Des Moines. And my parents own

[00:01:50] [SPEAKER_04]: on that side an Iowa foundation repair. It's a foundation repair company and they

[00:01:54] [SPEAKER_04]: do a lot of egress window covers. My dad actually invented one and has a patent on it now

[00:01:58] [SPEAKER_04]: as of two Christmases ago, which is super exciting. And so he used to build houses as well,

[00:02:04] [SPEAKER_04]: custom and spec homes, they have rental properties. So we just knew we would have a

[00:02:07] [SPEAKER_04]: lot of support here locally with people in the trades and having connections to that.

[00:02:13] [SPEAKER_04]: And they know how to invest and it really kind of taught us a lot of what we know today.

[00:02:17] [SPEAKER_04]: And then two, the bonus was that Des Moines is in the center of the state. So I didn't have to

[00:02:22] [SPEAKER_04]: have two additional state licenses as a realtor on top of my Ohio license coming from Cleveland.

[00:02:27] [SPEAKER_04]: Whereas where all the other cities that we have family in, Kansas City,

[00:02:31] [SPEAKER_04]: St. Louis, Omaha, you know, they're all border states. So then I would have to get

[00:02:35] [SPEAKER_04]: two more licenses. And then, yeah, we already owned the duplex here. So we were like, you know what?

[00:02:39] [SPEAKER_04]: We want to invest more in Des Moines and what easier way than being local and living there.

[00:02:44] [SPEAKER_02]: So yeah, tell me about you. You bought a duplex, you bought it here, you own here,

[00:02:48] [SPEAKER_04]: but you weren't here when you bought it. Yes. So that's actually a cool story. We

[00:02:53] [SPEAKER_04]: purchased that from my dad and stepmom. They remodeled it between 2019 and 2021.

[00:02:59] [SPEAKER_04]: And we saw it originally when they purchased it. It was disgusting and very dilapidated,

[00:03:05] [SPEAKER_04]: but it had a great location super close to downtown Des Moines. And my dad kind of offered up like

[00:03:12] [SPEAKER_04]: through kind of an offer out there and the guy accepted it. And so they bought it from them.

[00:03:16] [SPEAKER_04]: He spent two years completely remodeling it. And again, he used to build houses and stuff

[00:03:19] [SPEAKER_04]: and does foundation repair now. And so I knew he was doing a very good job. He would send

[00:03:25] [SPEAKER_04]: me kind of updates throughout the two years he was working on it. What do you think of this?

[00:03:28] [SPEAKER_04]: What color should I do for this? What color did this turn out? And so I was kind of keeping tabs

[00:03:33] [SPEAKER_04]: on the property, but never really thought twice. We sold our first house in Cleveland, Ohio and

[00:03:38] [SPEAKER_04]: walked away with a profit, which is why we sold it. We kind of saw what the market was doing.

[00:03:41] [SPEAKER_04]: We really wanted to start an investment portfolio, but we had spent a lot of our money on that

[00:03:46] [SPEAKER_04]: house doing the things that we did to it to make it worth so much. And so we decided to sell

[00:03:50] [SPEAKER_04]: and with that money, we wanted to buy our first duplex investment property. And then our,

[00:03:55] [SPEAKER_04]: what we thought at the time was our forever home out in Cleveland. So, and we did that. And

[00:04:00] [SPEAKER_04]: when we were actively putting in offers on duplexes out in the Cleveland, Ohio area,

[00:04:04] [SPEAKER_04]: we started missing out. We missed out on one offer to offer. We just couldn't make a deal come

[00:04:10] [SPEAKER_04]: together. And the duplexes out there, if anyone knows the Cleveland, Ohio area very well,

[00:04:15] [SPEAKER_04]: they're 100, 110, 120 years old. We didn't have a ton of family connections. We had really

[00:04:21] [SPEAKER_04]: built up an awesome sphere of influence with friends and stuff, but not really a whole

[00:04:25] [SPEAKER_04]: lot of people in the trades other than my realtor connections. We didn't have a ton of connections

[00:04:28] [SPEAKER_04]: out there for that kind of stuff. And so my dad called me one day when we were again missing

[00:04:33] [SPEAKER_04]: out on offers, putting offers in on duplexes out there. And he was like, Hey, remember

[00:04:37] [SPEAKER_04]: that duplex I bought on the south side of Des Moines? I think it's worth a lot more

[00:04:41] [SPEAKER_04]: than I paid for it. And I'm about done with the other unit. I might consider

[00:04:45] [SPEAKER_04]: selling it. What do you think it'd be worth? And so not having access at the time to

[00:04:49] [SPEAKER_04]: the Des Moines MLS, I did the best research I could and I called them back and I was like,

[00:04:53] [SPEAKER_04]: Holy crap, like this is definitely worth a lot more than you paid for it. You should consider

[00:04:57] [SPEAKER_04]: selling. And then when I got off the phone, I was like, wait a minute, why don't we buy

[00:05:03] [SPEAKER_04]: this duplex? If he's even remotely considering selling, we're looking to buy this duplex

[00:05:08] [SPEAKER_04]: was built in 1978 way newer than the ones we were putting offers in on and they were almost

[00:05:12] [SPEAKER_04]: 100 grand less in Des Moines than they were in Cleveland at that time. And so I called

[00:05:17] [SPEAKER_04]: him back and I was like, Listen, dad, you're going to sell this duplex and you're going to sell it

[00:05:20] [SPEAKER_04]: to me. And he was like, What? What do you want a duplex in Des Moines, Iowa for? And I was like,

[00:05:26] [SPEAKER_04]: Well, this is exactly what we've been looking for. And I trust you in the work you've done way

[00:05:31] [SPEAKER_04]: more than other flippers because we really want to turn key for our first duplex, try to make

[00:05:35] [SPEAKER_04]: it rent for as much as possible, make it as easy on us as possible as new investors.

[00:05:40] [SPEAKER_04]: And so yeah, so then we ended up buying it from him and we used a really cool loan on it.

[00:05:44] [SPEAKER_04]: And it took a long time to close on it because of the type of loan we did, but also because then

[00:05:48] [SPEAKER_04]: he got COVID pneumonia and was in the hospital for 34 days. And it was a whole cluster of a closing.

[00:05:55] [SPEAKER_04]: He insisted on still making the deal work because he knew we were so excited to start our

[00:05:58] [SPEAKER_04]: investment portfolio. But while he was in the hospital, he had to sign over power of

[00:06:03] [SPEAKER_04]: attorney to my stepmom so that she could sign on his behalf to sell it to us.

[00:06:06] [SPEAKER_04]: And then I had to sign over power of attorney to my boyfriend, now fiance, Carson,

[00:06:11] [SPEAKER_04]: and he was still up in Cleveland. So he had to take over power of attorney and sign on my

[00:06:15] [SPEAKER_04]: behalf. And that's how we made the deal close. It was interesting in a cluster,

[00:06:20] [SPEAKER_04]: but it was a great first purchase. And we still have it.

[00:06:23] [SPEAKER_02]: You still have it today. I'm curious on a couple of things, a loan for sure. But then also,

[00:06:27] [SPEAKER_02]: how did you manage the property from before?

[00:06:31] [SPEAKER_04]: So right when we closed on it, he actually had both sides filled when we were under

[00:06:35] [SPEAKER_04]: contract and had screened them. They've got years of experience him and my stepmom do

[00:06:39] [SPEAKER_04]: running these rentals and managing them. And right before closing or really the day of closing,

[00:06:45] [SPEAKER_04]: kind of the one unit, their lease was up and they moved out. They moved out of state.

[00:06:50] [SPEAKER_04]: So as soon as we closed on the duplex, we're like, Oh, great, really being thrown to the

[00:06:54] [SPEAKER_04]: wolves here. We thought we were getting this new fully occupied duplex. And now we got to

[00:06:58] [SPEAKER_04]: find tenants and we live three states away. And this is really stressful. And so we closed

[00:07:03] [SPEAKER_04]: on it when I'm still down. My dad was actually sick down in Florida. And so I was down there

[00:07:06] [SPEAKER_04]: with him. And while we closed on it, I was still there for like two more weeks. And so I was thinking

[00:07:11] [SPEAKER_04]: while I'm down in Florida, we get him out of the hospital, we're taking care of him,

[00:07:14] [SPEAKER_04]: and I'm setting them up for success so that I can come back to Ohio. And I start thinking about

[00:07:19] [SPEAKER_04]: Airbnb and how successful I think turning this now vacant unit in our first duplex into an

[00:07:27] [SPEAKER_04]: Airbnb could be. And so I did a lot of research. What is it close to? I technically

[00:07:32] [SPEAKER_04]: grew up in St. Louis, but every summer and every other holiday I was in the Des Moines area. But

[00:07:36] [SPEAKER_04]: again, down in the rural small town they live in. So not a ton of knowledge about Des Moines proper.

[00:07:42] [SPEAKER_04]: But yeah, so I started doing a bunch of research. I got a really good feeling for what a short

[00:07:45] [SPEAKER_04]: term rental could possibly do in the Des Moines area. And so I made a 15 PowerPoint

[00:07:51] [SPEAKER_04]: presentation. And as soon as I got back home to Cleveland from Florida, I sat my boyfriend

[00:07:57] [SPEAKER_04]: down in the living room and I was like, Listen, I want to present something to you.

[00:08:00] [SPEAKER_04]: And so I presented this to him and he claims after the first or second slide, he was like,

[00:08:04] [SPEAKER_04]: I'm in, I'm sold. Let's do it, but keep going because I worked so hard on the presentation.

[00:08:08] [SPEAKER_04]: And he's a data analyst. So I had to present the numbers to him, had to present different

[00:08:13] [SPEAKER_04]: things that bring people into Des Moines to make it worth it, how successful I think it could

[00:08:16] [SPEAKER_04]: be what those numbers look like. So yeah, that is in a roundabout way how that whole thing

[00:08:22] [SPEAKER_02]: happened and what we did. Let's see, I'll come at it. You presented your 15

[00:08:26] [SPEAKER_02]: bullet points slide you executed then on the Airbnb strategy. And how it turned out.

[00:08:32] [SPEAKER_04]: Yes, so it is definitely our best producing property so far mainly because about six months

[00:08:38] [SPEAKER_04]: later we turned the other unit into an Airbnb as well because that tenant also moved out. So

[00:08:42] [SPEAKER_04]: it's been a two unit Airbnb producing successful property since December of 2021, May of 2022

[00:08:52] [SPEAKER_04]: was when we transitioned the second unit. So it's got over two years now of Airbnb reviews,

[00:08:59] [SPEAKER_04]: VRBO reviews. And so we've got that success behind us now that's really like just launch

[00:09:06] [SPEAKER_04]: that property into our best performing because the other ones just don't have the history quite

[00:09:11] [SPEAKER_04]: yet. So yeah, we do our net profit obviously you have a ton of expenses out of each unit

[00:09:18] [SPEAKER_04]: because of all the utilities we pay the Wi-Fi replacing furniture replacing other supplies,

[00:09:24] [SPEAKER_04]: the cleaning fees, all that good stuff. So net profit if we can walk away with two an

[00:09:29] [SPEAKER_04]: average of two grand a month per unit, that's what makes us happy and that makes it worth the extra

[00:09:35] [SPEAKER_04]: work because short term rentals are obviously so much more work than a long term rental.

[00:09:40] [SPEAKER_02]: So yeah, it's been very successful. Let's talk about that. I'm curious as to what

[00:09:44] [SPEAKER_02]: create success in a short term rental versus a failure in a short term rental,

[00:09:49] [SPEAKER_02]: both on the property side. What is it and where is it physically located and then also on the

[00:09:55] [SPEAKER_02]: operation side because it's a hospitality business. It sure is and honestly location

[00:10:01] [SPEAKER_04]: totally matters and is huge, a huge part of the success of your short term rental. Don't

[00:10:06] [SPEAKER_04]: get me wrong but the management side might be more important. Like I'm really confident in

[00:10:10] [SPEAKER_04]: saying that how you manage it, who you're hiring to manage it if you're not managing it yourself.

[00:10:15] [SPEAKER_04]: Your cleaners like 90% of your business as a short term rental host and yeah so I'd say the

[00:10:21] [SPEAKER_04]: management is definitely more important than the location. Most people coming in from out of

[00:10:24] [SPEAKER_04]: town don't really know that this trendy neighborhood is slightly cooler and more

[00:10:28] [SPEAKER_04]: walkable than this neighborhood. So if you present and boost up your property and set

[00:10:35] [SPEAKER_04]: it up for as much success as possible with furnishings, decor, professional photos and

[00:10:39] [SPEAKER_04]: then a proper management system, you're probably going to do pretty well even if you're not in

[00:10:44] [SPEAKER_04]: the best most trendy is neighborhood. So yeah and then in terms of management, we have a big

[00:10:52] [SPEAKER_04]: advantage me being a realtor. I deal with all of our consumer facing things in our business

[00:10:58] [SPEAKER_04]: for short term rentals and him as a data analyst. He deals with a lot of our back-end

[00:11:02] [SPEAKER_04]: stuff like our pricing strategy and calendar blocking method and all that because we do

[00:11:08] [SPEAKER_04]: transition in the winter time, in the winter months to more a more medium method with travel nurses,

[00:11:13] [SPEAKER_04]: other travel professionals for 30 day plus stays ideally about two to three months if not a little

[00:11:18] [SPEAKER_04]: bit longer through the winter just because Airbnb is a little bit quieter here in Des Moines.

[00:11:22] [SPEAKER_02]: Did you notice a threshold in the number of reviews before you hit tremendous, you know,

[00:11:29] [SPEAKER_02]: the next level of success? You had to be doing this so long and achieve so many to call it

[00:11:34] [SPEAKER_02]: five star reviews and then sooner or later you're like, okay, now we're in the top when we come up,

[00:11:40] [SPEAKER_02]: when we get searched, we're the cream of the crop in the neighborhood.

[00:11:43] [SPEAKER_04]: Yes. So that's a lot of what he does for our business being the back-end guy but he understands

[00:11:48] [SPEAKER_04]: the whole algorithm and science behind it and what he always like that's very not within my

[00:11:57] [SPEAKER_04]: realm and my skill set. So I just kind of like go with whatever he suggests and says

[00:12:01] [SPEAKER_04]: that we need to do this to get more reviews. We need to prompt our guests when they're leaving

[00:12:06] [SPEAKER_04]: and checking out this way so that we guarantee a five star review and so a lot of what he tells me

[00:12:13] [SPEAKER_04]: is that last final message directly and slightly aggressively and like kosher way asking for

[00:12:21] [SPEAKER_04]: that five star review upfront which is something I do in my real estate business too as soon

[00:12:25] [SPEAKER_04]: as I close on a property with a client, I'm asking for a five star review not, hey,

[00:12:29] [SPEAKER_04]: give me a review. Here's the link but I would love if you had a great experience for you to

[00:12:33] [SPEAKER_04]: give me a five star review so directly asking is huge and then in terms of like where we're at on

[00:12:39] [SPEAKER_04]: the profile when people search Des Moines, like we try to update our listing on the back-end

[00:12:43] [SPEAKER_04]: side so much that the algorithm favors our listings to the point that they boost us and

[00:12:47] [SPEAKER_04]: push us to that front page if not one of the very first listings that pops up on the second

[00:12:51] [SPEAKER_04]: page when people are searching places to stay in Des Moines, Iowa. So that's another strategy

[00:12:56] [SPEAKER_04]: but yeah so always updating your listing whether it's messing with your calendar,

[00:13:00] [SPEAKER_04]: your pricing a little bit, changing the title of your listing, updating the description of each photo

[00:13:07] [SPEAKER_04]: and then definitely professional photos. I mean people that don't have professional photos aren't

[00:13:11] [SPEAKER_04]: even in the same realm as us like as bad as that sounds like you know it's well and it's a $240

[00:13:17] [SPEAKER_04]: thing like investment. Exactly and for that little of an investment when you've already

[00:13:23] [SPEAKER_04]: spent five, six, eight grand on furnishing, 30 grand on the down payment to even acquire the property

[00:13:28] [SPEAKER_04]: it's like you're gonna cheap out on $240 and not do professional photos so that's a huge thing too

[00:13:33] [SPEAKER_04]: that sets you up for success but yeah I mean again he knows all the nitty gritty of this but

[00:13:38] [SPEAKER_04]: I believe it's once you get beyond three reviews on a new listing you no longer have the tag on

[00:13:44] [SPEAKER_04]: Airbnb of new listing and so what we love about that and why we really try to like

[00:13:48] [SPEAKER_04]: get those first three like right off the bat bam bam bam is that then you're not seen as like oh

[00:13:54] [SPEAKER_04]: they're new they could mess up you're seen as I'm gonna book this place because this place has five

[00:13:59] [SPEAKER_04]: five star reviews and five people individually have said this place is great so that's definitely

[00:14:04] [SPEAKER_02]: part of our strategy. Tell me about the loan that you guys utilize to acquire this duplex.

[00:14:08] [SPEAKER_04]: So it's got a million different names it's and there's like no information out there on it

[00:14:12] [SPEAKER_04]: it was really hard to do research when we decided to try this out but it's called an offset

[00:14:16] [SPEAKER_04]: mortgage or an all-in-one mortgage or an interest only mortgage and so essentially what it is is

[00:14:24] [SPEAKER_04]: kind of like a HELOC. It's almost like a combination of like a regular mortgage payment plus a HELOC

[00:14:30] [SPEAKER_04]: plus a bank account so it's like all three of those combined into one loan and essentially we

[00:14:37] [SPEAKER_04]: as soon as we closed on the duplex we put 25 percent down because it was a true investment

[00:14:43] [SPEAKER_04]: property we were not planning to live there we had two tenants or we're supposed to when we close it on

[00:14:48] [SPEAKER_04]: it and so we put our 25 percent down on the property that goes into this bank account.

[00:14:54] [SPEAKER_04]: It's basically like a checking account at closing that you get an even you even get a debit card

[00:14:59] [SPEAKER_04]: to it it's very strange a lot of people if you can imagine would definitely like go way off the

[00:15:05] [SPEAKER_04]: deep end after closing and go buy luxury vehicle or toys or whatever and so that's also why the

[00:15:11] [SPEAKER_04]: closing process took so long was because the underwriting of a deal like that is even more

[00:15:17] [SPEAKER_04]: detailed than a regular mortgages even because they want to make sure that you're financially stable

[00:15:21] [SPEAKER_04]: you make good decisions and that kind of stuff. Yeah so as soon as we closed we could technically

[00:15:26] [SPEAKER_04]: pull out a big portion you do have to leave a little bit in there I want to say it's 10 percent

[00:15:30] [SPEAKER_04]: but don't quote me on that you do have to leave some of your equity in that account

[00:15:33] [SPEAKER_04]: from your down payment but in theory you could pull out the rest of it if you needed to

[00:15:37] [SPEAKER_04]: and go buy something else and that's why we wanted to do it we knew we were putting a lot

[00:15:41] [SPEAKER_04]: of our cash on hand into this first duplex and we were super excited to do it but there's also

[00:15:46] [SPEAKER_04]: that risk of like well what if in six months we want to buy another one like we're gonna have

[00:15:49] [SPEAKER_04]: to wait three more years to bounce back to have a 25 down payment for the next one so

[00:15:54] [SPEAKER_04]: it just allows you that option like a HELOC does of pulling that equity out and putting it to

[00:15:59] [SPEAKER_04]: work and leveraging debt in a way to snowball into the next one two three.

[00:16:06] [SPEAKER_02]: 75% is that a fixed rate first mortgage with an amortization schedule?

[00:16:10] [SPEAKER_04]: It is not so it is a variable interest rate but each month you are only paying interest

[00:16:15] [SPEAKER_04]: so that's where the name interest only loan comes from you're only paying the interest every month

[00:16:20] [SPEAKER_04]: so the more money you keep in that account the less interest you're paying each month

[00:16:25] [SPEAKER_04]: so as much as we did this so that if we needed to pull out we could

[00:16:30] [SPEAKER_04]: we actually do the opposite we show as much money in there as possible

[00:16:34] [SPEAKER_04]: because the sooner we pay off that mortgage or pay it down to the point that it's

[00:16:41] [SPEAKER_04]: pennies of interest every month the more we're cash flowing and again that's our best

[00:16:46] [SPEAKER_04]: producing property and so it's very attractive for us at this time to just shove as much

[00:16:53] [SPEAKER_04]: money in there as possible make that interest go down that we're paying every month

[00:16:56] [SPEAKER_04]: but knowing that god forbid the perfect package of properties or whatever present itself to us

[00:17:01] [SPEAKER_04]: we could pull out a significant amount of money and not have to get into our personal reserves

[00:17:06] [SPEAKER_01]: or savings or anything. Hey Iowa investors this is Ava Bowkamp chief of staff at Legacy Impact

[00:17:11] [SPEAKER_01]: Investors have you thought about adding real estate to your portfolio but don't have the

[00:17:15] [SPEAKER_01]: time or desire to play landlord? At Legacy Impact Investors we do the heavy lifting

[00:17:20] [SPEAKER_01]: our team finds the deals manages the properties and handles all the day-to-day

[00:17:25] [SPEAKER_01]: operations our select group of qualified investors co-invest with us gaining ownership equity

[00:17:30] [SPEAKER_01]: without opening a tenant email or responding to a maintenance call they just share in the

[00:17:35] [SPEAKER_01]: income appreciation and tax benefits these opportunities aren't for everyone they are

[00:17:40] [SPEAKER_01]: for qualified accredited investors only if you want to learn more please visit Legacy

[00:17:45] [SPEAKER_01]: Impact Investors dot com to apply. All right that's a wonderful story about the first one

[00:17:50] [SPEAKER_02]: that it's so many facets to it. Yes. You moved on eventually and bought your second one tell me

[00:17:56] [SPEAKER_04]: about that. Yes so there's a lot of other details that go into the storyline because we when we

[00:18:02] [SPEAKER_04]: decided to move to Des Moines we actually started renting out that forever home in Cleveland

[00:18:07] [SPEAKER_04]: that we thought we'd like potentially raise kids in someday you know so it was a sizable

[00:18:11] [SPEAKER_04]: four bed three and a half bath home with a finished basement and so we ended up renting

[00:18:15] [SPEAKER_04]: that out and cash flowed very nicely for over a year to a family that had sold their house the

[00:18:21] [SPEAKER_04]: interest rates were rising so they didn't want to buy it and they didn't know how long they were

[00:18:24] [SPEAKER_04]: going to be in the area but they still wanted a nice home they had three kids so they moved

[00:18:28] [SPEAKER_04]: into our house we moved to Des Moines and we cash flowed on that for about a year and two

[00:18:33] [SPEAKER_04]: months three months and then we kind of evaluated and sold that one and we wanted to

[00:18:40] [SPEAKER_04]: with the purpose of as much as it was cash flowing and as much as a luxury single family

[00:18:45] [SPEAKER_04]: long-term rental is a snooze fest for people like us because we're so used to short-term rentals and

[00:18:51] [SPEAKER_04]: all the work that goes into that we decided to bring that money and put it into further

[00:18:56] [SPEAKER_04]: investing in Des Moines. We really believe in this area we want to be local investors

[00:19:00] [SPEAKER_04]: we've been out of state investors now twice yeah so then our second property was another

[00:19:05] [SPEAKER_04]: duplex in Des Moines and I got that lead for us from letters that I sent out they were just

[00:19:12] [SPEAKER_04]: dear seller letters, dear investor letters and they had a couple pictures of us on it and it was

[00:19:18] [SPEAKER_04]: just like hey look we're new to town we moved here to be closer to family we are looking to

[00:19:24] [SPEAKER_04]: grow our real estate portfolio we own the duplex over at blah blah blah Main Street I actually

[00:19:30] [SPEAKER_04]: gave them the address because I wanted them if they are in that area to drive by and see how

[00:19:34] [SPEAKER_04]: nice it is and see wow these people really take care of their properties because there is a little bit

[00:19:40] [SPEAKER_04]: of emotion especially for these Des Moines investors it's not a lot about estate big

[00:19:44] [SPEAKER_04]: with California New York investors that own these properties here it's local guys that are in their

[00:19:50] [SPEAKER_04]: sixties now sometimes that over the years acquired three four five duplexes and they own them free

[00:19:57] [SPEAKER_04]: and clear now and like that's kind of the person the investor buy box here in Des Moines

[00:20:01] [SPEAKER_04]: and knowing that we wanted it to feel very personal because it is personal we believe in

[00:20:06] [SPEAKER_04]: this area so yeah we wrote letters I sent them out to the first time 50 duplex owners the second

[00:20:12] [SPEAKER_04]: time I sent the letter out to 25 I've gotten six callbacks like super serious callbacks

[00:20:17] [SPEAKER_04]: out of the 75 letters I've sent and one of them turned into said second duplex deal

[00:20:23] [SPEAKER_04]: and these couple was moving out of state to be closer to family so it all hit home with them

[00:20:29] [SPEAKER_04]: and they had just bought it two years prior and they lived the house hatched they lived in one half

[00:20:33] [SPEAKER_04]: and fixed it up and the inside was really cute and then the other half was always a rental

[00:20:38] [SPEAKER_04]: and hadn't really touched the outside they hadn't touched the other unit but the one unit was

[00:20:42] [SPEAKER_04]: in pretty good shape and was pretty cute so we were like you know what we can finish out the

[00:20:47] [SPEAKER_04]: rest so they sold that duplex to us about a year and a couple months ago and since then we've

[00:20:55] [SPEAKER_04]: completely transformed it even the side that they had done we put new countertops in some new light

[00:21:00] [SPEAKER_04]: fixtures a couple other things turned that into a Taylor Swift themed air bmb and then the other side

[00:21:06] [SPEAKER_04]: we completely gutted I mean we took everything out and redid the entire other inside and then

[00:21:12] [SPEAKER_04]: we actually gutted the outside too and transformed that so that it's just up to that caliber

[00:21:17] [SPEAKER_04]: of our first duplex that my dad fixed up before we bought so air bmb as well it is now two

[00:21:23] [SPEAKER_04]: air bmb's as well even though after the first two we were like we're never going to do this it's so

[00:21:26] [SPEAKER_04]: much work you know you get your place to a point where it's so nice and you kind of run those

[00:21:32] [SPEAKER_04]: numbers in your head especially since we already had two successful doors that were air bmbs prior

[00:21:37] [SPEAKER_04]: to this and we were like dang it here we go again here's another six grand in furnishings

[00:21:43] [SPEAKER_04]: so yeah it was just too tempting and we had put so much time effort energy sweat equity in it so

[00:21:49] [SPEAKER_04]: yeah and now that one's great bring me current how many air bmbs you have today so we have six air

[00:21:56] [SPEAKER_04]: bmbs today and that's counting our primary which I told you we are crazy and rented that out for a

[00:22:04] [SPEAKER_04]: few months to a couple that's building a new construction custom home and it was taking a

[00:22:10] [SPEAKER_04]: significant amount longer than they were expecting and so they approached us and we moved out

[00:22:17] [SPEAKER_02]: basically overnight yeah they approached you and we talked about this offline on a Tuesday

[00:22:22] [SPEAKER_04]: for them to move in on Sunday yes yes yeah my other half was like no way Jose this is never

[00:22:28] [SPEAKER_04]: going to work it's Tuesday you want to move in on Sunday and I was like you know what I think we

[00:22:34] [SPEAKER_04]: could do it it's not that hard we've done harder things before we've moved across the country

[00:22:38] [SPEAKER_04]: twice together we can do this and so we did and they've been super happy in there and it's

[00:22:43] [SPEAKER_04]: made their transition so much easier and smoother and so while we are cash flowing on that and it's

[00:22:50] [SPEAKER_04]: a very good financial thing for us it's also a really good comfort thing for them and we're at

[00:22:56] [SPEAKER_04]: very different points in our lives they needed that we needed this and we didn't need it but

[00:23:00] [SPEAKER_04]: we saw an opportunity and we're not afraid to put ourselves in hard positions or uncomfortable

[00:23:06] [SPEAKER_04]: positions for future success in the long run please tell me you went on air bmbs and rented

[00:23:12] [SPEAKER_04]: one when you had to move out no so we are insane and we actually moved in with all of our clothes

[00:23:21] [SPEAKER_04]: and the couple other things that we took with us we moved into my parents basement down in that

[00:23:26] [SPEAKER_04]: small community for like a month and a half and then we closed on another rental which was a

[00:23:31] [SPEAKER_04]: little single family house and we moved into that from their basement and then fixed that up

[00:23:37] [SPEAKER_04]: and remodeled it and then furnished it while we lived there and he works from home 100% of the

[00:23:42] [SPEAKER_04]: time too I mean I work from home too don't get me wrong but I'm in and out of the house all day is

[00:23:47] [SPEAKER_04]: a realtor he's at home all day so he worked in a construction zone all winter as we fixed this

[00:23:54] [SPEAKER_04]: place up and furnished it and then once we were done with that I rented it out to a travel nurse

[00:23:59] [SPEAKER_04]: and I was like oh crap we're homeless again so then we moved into the duplex we had been

[00:24:05] [SPEAKER_04]: remodeling both sides the vacant side that we completely gutted we moved into that and then

[00:24:12] [SPEAKER_04]: finished up fixing that up and furnished it and then I got that rented out to another travel nurse

[00:24:17] [SPEAKER_04]: this winter and so then we moved next door because my long-term tenant that was in there

[00:24:21] [SPEAKER_04]: decided to move out and we decided I guess we're turning it into the air bmb again

[00:24:24] [SPEAKER_04]: and so we moved out into her unit and fixed that up just a tiny bit since that one was already

[00:24:30] [SPEAKER_04]: kind of cute from the previous owners and then we furnished that the Taylor Swift theme

[00:24:35] [SPEAKER_04]: and so he worked from home full-time god love him in a Taylor Swift themed air bmb for like

[00:24:42] [SPEAKER_04]: a month and a half so that's yes we are willing to do whatever it takes is you are professional

[00:24:48] [SPEAKER_04]: movers yeah yes that too that too what are you most excited about this year oh that's a hard one

[00:24:56] [SPEAKER_04]: I am probably most excited to get a full year under our belt of these other short-term runals that we've

[00:25:07] [SPEAKER_04]: added to our portfolio because like I said you know the first duplex we had with the two

[00:25:12] [SPEAKER_04]: has been a very successful property I can confidently say that too because we've had two

[00:25:17] [SPEAKER_04]: years plus of running those as short-term runals and so you have this transition period where

[00:25:23] [SPEAKER_04]: you're a little slow at start and then you kind of pick up some momentum and then you got to figure

[00:25:27] [SPEAKER_04]: out some things here and there like what do you need to change because it's not working for that air bmb

[00:25:32] [SPEAKER_04]: and so we are really really excited to see those keep building and snowballing success and then

[00:25:41] [SPEAKER_04]: a year from now a year and a half from now being able to look back and look at those numbers

[00:25:45] [SPEAKER_04]: and see how they compared the first duplex and see how they compare to what we know they

[00:25:49] [SPEAKER_04]: could rent out long term because that's our other thing is like we don't have our heart set on anything

[00:25:54] [SPEAKER_04]: like we are opportunists we are not risky we're very like much calculated risk people but if

[00:26:02] [SPEAKER_04]: we see an opportunity we're going to take it and so knowing how much work this is on both of us

[00:26:07] [SPEAKER_04]: for the short and medium-term method we use you know if there's ever a day where we look

[00:26:12] [SPEAKER_04]: back at the numbers and it's not proving to be double if not triple what we could be netting

[00:26:18] [SPEAKER_04]: renting them all out long term then we're going to cut the cord i'm going to sell the furniture and

[00:26:22] [SPEAKER_04]: decor on marketplace and we're going to row in the towel on the short-term medium-term method and

[00:26:26] [SPEAKER_04]: go long term and that's fine we're setting ourselves up for success when we underwrite

[00:26:30] [SPEAKER_04]: these deals that they could still make sense as long-term models for you why iowa what

[00:26:34] [SPEAKER_04]: keeps you here family um we ask ourselves that every winter why are we still in the midwest

[00:26:40] [SPEAKER_04]: this sucks um but yeah it's really just the proximity to family we've got grandparents

[00:26:46] [SPEAKER_04]: in their 70s 80s almost 90 now and our old souls we love the older people in our lives and so it's

[00:26:55] [SPEAKER_04]: we really wanted to take advantage of we can live anywhere we should move closer like we need to take

[00:27:01] [SPEAKER_04]: that as an opportunity and what we're building our portfolio up to as well is to own a vacation

[00:27:05] [SPEAKER_04]: rental and probably arizona we love arizona so we kind of want that lifestyle option of being

[00:27:11] [SPEAKER_04]: empty nesters snowbirds at a very young age because if we build the life we want then we'll

[00:27:18] [SPEAKER_04]: have be able to do that so that's why we're here we know that we can go south once we get our

[00:27:25] [SPEAKER_04]: portfolio up to that point and want to take that plunge but family is worth it if you're a

[00:27:30] [SPEAKER_03]: house flipper execute the burst strategy or do double closings and are in need of money

[00:27:35] [SPEAKER_03]: little guy loans is your go-to lender here in the Des Moines area time is money loan approvals

[00:27:42] [SPEAKER_03]: in 24 hours closings in five days little guy loans was founded by Neil Timmins an investor

[00:27:49] [SPEAKER_03]: just like you since he has been in over 10 000 homes in Des Moines there's never an appraisal

[00:27:54] [SPEAKER_03]: houses multifamily and commercial property loans up to one million check out www.littleguylones.com

[00:28:04] [SPEAKER_02]: Kelsey Ridley for the final three questions yeah if you had one piece of advice for your 20 year

[00:28:09] [SPEAKER_04]: old self what would be oh gosh so much advice but the biggest one would be house hack house hack

[00:28:16] [SPEAKER_04]: house hack house hack like don't go don't get caught up wanting to rent the big beautiful

[00:28:22] [SPEAKER_04]: new construction apartment building with the fancy pool and the fancy gym and all your friends

[00:28:26] [SPEAKER_04]: live there no don't do it go three and a half percent down fha buy your first duplex live

[00:28:32] [SPEAKER_04]: in one half later tenant pay the other that's what I would have done and that's what we both

[00:28:37] [SPEAKER_04]: are very much in agreement that we would have done if we were to do it all over again

[00:28:40] [SPEAKER_04]: and then just do that every year whether it's three and a half or five percent down whatever

[00:28:45] [SPEAKER_04]: that's so minimal and so easy to save up for even especially when you're young professional

[00:28:50] [SPEAKER_04]: you know you don't have little ones to pay for and take care of and so yeah we would have

[00:28:55] [SPEAKER_04]: just house hacked a duplex every single year and that would have been the easiest way to

[00:29:00] [SPEAKER_04]: build our portfolio and we'd probably have quadrupled the portfolio we have now so

[00:29:04] [SPEAKER_04]: two books that changed your life oh okay the biggest one that changed my life he actually

[00:29:10] [SPEAKER_04]: suggested to me and it was called leadership and self deception it's super super good i've

[00:29:16] [SPEAKER_04]: recommended it to friends that are having like marital problems and friends that are

[00:29:20] [SPEAKER_04]: having work issues and it's a very much a mindset book it's not necessarily as much as i

[00:29:26] [SPEAKER_04]: pretty much only listen to and read anything about real estate it's actually not real estate related

[00:29:31] [SPEAKER_04]: it's more just everyone should read this book it's really good and it's all about getting

[00:29:37] [SPEAKER_04]: yourself outside that box seeing the big picture being a better person looking at things more

[00:29:43] [SPEAKER_04]: positively and that definitely changed the trajectory of my life for sure and the other book

[00:29:51] [SPEAKER_04]: hmm i'm rereading now the bigger pockets multi-family millionaire and i'm getting bits and pieces from

[00:30:00] [SPEAKER_04]: it that i don't even think i picked up the last time and as like semi experienced investors

[00:30:07] [SPEAKER_04]: in a realtor that knows the business i'm still learning from it the second time through so that's

[00:30:12] [SPEAKER_04]: a great book but then also there's a book called fire i know you said only two books which is

[00:30:17] [SPEAKER_04]: financial oh my gosh i'm blanking financial independence real estate yeah real estate through

[00:30:23] [SPEAKER_04]: real estate so fire is just the whole method of like building a real estate portfolio to pay for

[00:30:29] [SPEAKER_04]: your lifestyle so that you're not stuck in that w2 job miserable but yeah i could list off like

[00:30:34] [SPEAKER_04]: seven more to be honest that was a real can of worms i know you're plugged in on theirs all

[00:30:39] [SPEAKER_02]: right if you were cast away on an island for a year you can only get three pieces of data

[00:30:44] [SPEAKER_02]: about your business each and every month what three pieces of information must you know about your

[00:30:49] [SPEAKER_04]: business to know how it's fine i want to know number one what is the absolute net income after all

[00:31:01] [SPEAKER_04]: expenses are taken out the mortgage payment or on our one duplex the interest what does that raw

[00:31:07] [SPEAKER_04]: number money in our pocket look like at the end of each month that would definitely be number one

[00:31:12] [SPEAKER_04]: number two would be what are expenses because if i ever see a dip in number one it's due typically to

[00:31:19] [SPEAKER_04]: number two and i need to understand that even during the months where we're doing super well

[00:31:25] [SPEAKER_04]: with that net income so i would say net income are operating expenses and then three would probably

[00:31:33] [SPEAKER_04]: just be market data i want to know what that duplex is worth at all times which is where i have a

[00:31:40] [SPEAKER_04]: very very much an in as a realtor is i'm always on top of what multifamily properties what single

[00:31:47] [SPEAKER_04]: family properties are worth in demoine as a realtor anyways so that gives us a huge advantage if we

[00:31:53] [SPEAKER_04]: ever see it hit a certain point that we think x duplex is worth x amount and it makes sense for

[00:31:58] [SPEAKER_04]: us to offload that property great if it makes sense for us to hold it because we think it's

[00:32:02] [SPEAKER_04]: going to be worth even more later great so i would say that would probably be the third

[00:32:05] [SPEAKER_04]: information i want on that island is what is the property worth due to market data

[00:32:12] [SPEAKER_02]: kelsey i've asked lots of questions what's one question i did not ask but should have

[00:32:18] [SPEAKER_04]: maybe what our future plans are yeah let's talk about it yeah so we are very much quality over

[00:32:24] [SPEAKER_04]: quantity we believe in a real estate portfolio that will more than pay for the lifestyle we want

[00:32:30] [SPEAKER_04]: to live plus saving for future generations in our future life but not sacrificing building a

[00:32:39] [SPEAKER_04]: business we have no ambition to have 100 200 300 doors in our portfolio that's never what we've

[00:32:44] [SPEAKER_04]: set out to do which some old school investors think i'm kind of ignorant when i say that but

[00:32:49] [SPEAKER_04]: we want quality over quantity i want to know that our properties are all to the caliber

[00:32:55] [SPEAKER_04]: that if at any time in our lives we need to live in them we would feel confident doing that

[00:32:59] [SPEAKER_04]: that's one ethically as a realtor and as a landlord i never want to put my tenants in a place or my

[00:33:07] [SPEAKER_04]: guests in a place that i wouldn't personally live in that bothers me if that wasn't the case so

[00:33:13] [SPEAKER_04]: that is really important but then also just the quality over quantity method we find gets you

[00:33:19] [SPEAKER_04]: more income off of less doors and less liability and less work sometimes so we just really love

[00:33:28] [SPEAKER_04]: quality over quantity so as much as i say like we're not really actively looking right now

[00:33:32] [SPEAKER_04]: we're about to put an offer in on something we put an offer in like two months ago or a month and a

[00:33:37] [SPEAKER_04]: half ago on something else so the right opportunity lands again we're opportunists we're gonna look

[00:33:42] [SPEAKER_04]: into it run the numbers and maybe act on something but we also aren't super hungry you know to add

[00:33:48] [SPEAKER_04]: a million more doors to our portfolio we want it to be sustainable tell us this has been a

[00:33:53] [SPEAKER_02]: great conversation it's wonderful to hear here because you've done a lot in a very short period

[00:33:58] [SPEAKER_02]: of time tremendous amount of experiences for people they want to find you they want to follow you

[00:34:02] [SPEAKER_02]: they want to connect with you where can they go what should they do so instagram is probably

[00:34:06] [SPEAKER_04]: where i'm most active and i favor the most which would just be at porta style p or ta

[00:34:13] [SPEAKER_04]: style s ty le dot real dot estate that's definitely where i'm the most active but also i do have

[00:34:20] [SPEAKER_04]: a website it's called porta style homes dot com and i do blog a lot there and i blog about real

[00:34:26] [SPEAKER_04]: state business stuff in general as a realtor but then i also include a lot of my investing on

[00:34:32] [SPEAKER_04]: there actually some of our portfolio is on there as well with some details of how those deals happen

[00:34:37] [SPEAKER_04]: and how they came to life and what we do with them so yeah the website and my instagram is

[00:34:43] [SPEAKER_02]: definitely the best place thanks below on this show notes for everybody kelsie i appreciate

[00:34:46] [SPEAKER_02]: thank you thanks for listening if you're enjoying the show may i ask a favor of you

[00:34:51] [SPEAKER_02]: naturally subscribe so you never miss an episode but would you rate and leave an honest written review

[00:34:57] [SPEAKER_02]: on apple podcasts does a lot for us here at the show and i appreciate reading your thoughts

[00:35:02] [SPEAKER_02]: great guests make for a great show if you know of another island who would be a great guest

[00:35:07] [SPEAKER_02]: or you yourself have interest in being a guest well get on our radar visit investing

[00:35:13] [SPEAKER_02]: in iowa to fill out an application or recommend a guest and if you want to connect with me one on

[00:35:19] [SPEAKER_02]: one go legacy impact investors dot com click on the invest with us button in the top right corner

[00:35:26] [SPEAKER_02]: and there you can pick a time for the two of us to get on the calendar and connect until next time

[00:35:32] [SPEAKER_02]: keep investing in iowa